Crypto markets are going through a rough patch in recent weeks. Bitcoin has dropped below the crucial $100,000 level, touching its lowest point in six months and altcoins have also recorded heavy losses.
Sentiment is tense and volatility is rising, but not everyone agrees that the industry is in a true bear market.
Some point to the massive October 10 liquidation event, shrinking spot demand, and slowing stablecoin liquidity as signs of an extremely bearish phase. Others believe that this is still “the easiest bear market” they have ever seen. Here’s why.
Analysts Say This Is Not a Real Bear Market
Dragonfly Capital’s Managing Partner Haseeb Kerem says that the current market downturn is far from a true bear market. He notes that the industry has already endured far more severe stress, most notably in 2022, when major collapses hit one after another like Luna, 3AC, FTX, Genesis, BlockFi, Axie, and NFTs.
Several banks collapsed, stablecoins lost their pegs, and regulators increased their oversight of the sector. He notes how the previous administration took an aggressive stance toward almost every major crypto company.
Fundamentals Remain Strong
However, today’s scenario looks very different. “Compared to that? This is breezy,” he says. Although prices have pulled back, he notes that the underlying fundamentals remain strong and the crypto ecosystem is “working”.
Some users argue that the recent market events like the “largest liquidation event in crypto history,” revealed weaknesses in the market’s infrastructure and exposed how much liquidity is tied up in loops.
Kerem disagrees, explaining that the event appeared large because crypto prices are much higher today and because reporting is more complete than in past years.
Another user questioned why anyone would join a market where prices can crash 99% in a minute. Kerem notes that the crypto industry has already survived far more extreme situations than a few altcoins getting wiped out.
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The End of Bear Phase?
Adding to this perspective, Bitwise CEO Hunter Horsley says that the familiar “four-year cycle” no longer reflects how the crypto market actually works.
With the launch of Bitcoin ETFs and the arrival of the new Trump administration, the entire market structure has shifted, with new market players, new dynamics and reasons behind why people buy or sell crypto.
According to Horsley, crypto may have already been in a quiet bear phase for nearly six months now and almost through it. “The setup for crypto right now has never been stronger,” he says.
He has also said that the current developments in crypto may be the most bullish the industry has seen in a decade.
Bitcoin is currently trading at $96,902, down over 6% in the past 24 hours. While the volatility remains high, the broader crypto market appears far more resilient than in past downturns.
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FAQs
Many analysts say no. They view this pullback as a mild correction compared to past crises, with the industry’s core systems still functioning well.
A massive liquidation event and lower spot demand sparked sharp swings, but these shocks are seen as normal in a maturing market.
Some analysts believe we’re already near the end of a quiet six-month bear phase, with conditions setting up for a stronger recovery ahead.
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